BUZZ-Valeant Pharmaceuticals: Morgan Stanley lifts to top rating

** Canadian drugmaker's U.S-listed shares up 9 pct
at $29.10 premarket after Morgan Stanley upgrades to
"overweight" from "equal weight" - first upgrade to a "buy" or
equivalent rating in the past year

** Morgan Stanley says it is more constructive on the stock
after company's positive announcements, including reiteration of
2016 outlook and plans to sell assets to pay down debt

** Valeant is offering to pay lenders higher interest rates
in order to obtain an amendment to its debt agreement that would
loosen one of its covenants, Reuters reported on Tuesday

** Morgan Stanley expects co to successfully renegotiate
debt covenants on modest terms, pay down $5 bln in debt over the
next year and succeed in "billion of dollars" worth of asset
divestitures

** "Our investment thesis is primarily a multiple call -
that as new management transforms Valeant and reduces debt,
VRX's stock multiple can expand," MS analysts wrote in a note

** MS lifts PT on U.S. stock to $42 from $33; median PT is
$35

** Of 20 analysts covering the stock, 5 have a "buy" or
higher rating, 11 have a "hold" and 4 a "sell" or equivalent
rating